If you are a veteran of the military or an active member of the military, then it is your right to be able to use your service to obtain a VA Loan. Now if you are misguided and think that you need great credit in order to get a VA Loan, you are mistaken as you can get a 2022 VA Loan With Bad Credit and we will go over those items in this article as well as a real-world experience. To begin with, the VA Loan product is one of the proudest loan programs we offer here at Loan Consultants for the fact that it takes care of the people that have put their lives on the line for us. To give these individuals a great loan as a “thank you” for their service is the least we can do. To start with, if you don’t know all the great features of VA Loans, let me go into them real quick before we get into the details of a 2022 VA Loan With Bad Credit.
There is a reason why most borrowers wish they could have a VA Loan, and one of the best qualities this loan program has is that it offers no money down options with 100% financing giving you a loan without any money out of pocket. To have access to this loan, I mentioned earlier that you will need to be a veteran of the military, but there is more to it than just being a veteran. You are going to need to make sure you have an honorable discharge from the military when your service was complete and also possess a Certificate of Eligibility or a COE for short. It may take you some time to get a COE after your service has ended, but you will need it to proceed with a loan. If you do not obtain a Certificate of Eligibility, there is no way you are going to get a loan, let alone a 2022 VA Loan With Bad Credit. To be eligible for a COE you will need to have qualifying time served which can be the following:
– Served 90 days of active duty during a wartime
– Served 181 days of active duty during peacetime
– Completion of 6 years of active service in the National Guard or Reserves
– You are the surviving spouse of a veteran or service member who died in the line of duty or from a service-related disability
The role of the VA or US Department of Veteran’s Affairs as it pertains to VA Loans mimics the role of the Federal Housing Authority or FHA to FHA Loans. The VA is in charge of creating the guidelines for all VA Loans, however, the VA is not a mortgage lender but the insurer of all loans that are originated under a VA Loan program. The VA insures VA Loans against default and also offer some of the most attractive mortgage rates in the industry and with lower mortgage rates results in cheaper monthly payments when compared to other loan programs.
Obviously as a new home borrower, you are trained to assume that you need good credit in order to purchase a home and I will say that although good credit always helps, it is not necessarily needed depending on the loan program. Now if you are interested in a 2022 VA Loan With Bad Credit you may be wondering what the VA requirements are for credit scores and if you can even have a chance at obtaining a VA Loan given your credit situation. The good news is that given the VA guidelines, they are interested in getting as many people as possible into homes using a VA Loan. As we mentioned earlier, the VA makes the guidelines for VA Loans and they do not require a minimum credit score in order to obtain a VA Loan. Now just because the VA says there are no limits to credit scores doesn’t mean your lender won’t enforce a credit score minimum. In most cases you will see lenders require a 620 FICO in order to do a VA Loan. Here at Loan Consultants this is not the case as we will do a VA Loan with a minimum of a 580 FICO. We are different than other lenders in the sense that we don’t have additional lender overlays. Lender overlays are additional requirements by lenders needed in order to get approved for a loan. Lenders use overlays to limit the risk factor associated with prospective borrowers. If you are currently working with a lender who wants a minimum FICO score above 580, you need to evaluate your situation and give us a call immediately at 888-900-1020 and we can get you in a program with the lowest possible credit score for a 2022 VA Loan With Bad Credit.
As mentioned earlier, it is up to the lender to determine what mandatory credit scores will be but if I can give you any advice, it would be to get the lender guidelines NOT the loan program guidelines and see what the lender is truly using as their requirement. There is always a difference between what a loan officer says the minimum FICO score is and what the lender actually wants to approve loans. You can see in the items below and if you are met with these FICO requirements, please reach out to us ASAP.
– VA Loans: Minimum 620 FICO from most lenders (We do 580 FICO)
– FHA Loans: Minimum 620 FICO from most lenders (We do 580 FICO)
– USDA Loans: Minimum 660 FICO from most lenders
– Conventional Loans: TO obtain best rates you will need 720+ FICO
Just because one lender may reject your loan application doesn’t mean you need to give up hope. If you still think you can qualify for a 2022 VA Loan With Bad Credit, then you need to keep trying and there will be a program out there for you. If you are stuck with a FICO score in the low 500’s then there is definitely some actions you can take that will boost your credit. You can look to add $500 secured credit cards and each card can boost your FICO by 10-20 points or you can be added on to a same last name family member’s credit card as an authorized user and you will take on their positive credit history as your own which will boost your scores as well. If you are going the authorized user route, you need to make sure the person has perfect credit history or this can end up hurting your credit score. There is no reason you shouldn’t be able to qualify for a 2022 VA Loan With Bad Credit, especially if you have at least a 580 FICO credit score. A quick example I’d like to share is recently we have a borrower get approved with a 583 FICO score and 60% debt to income ratio. This is normally unheard of but we got his deal approved and closed in 3 weeks! There is no reason why we can’t help you, so please call us ASAP at 888-900-1020 days, nights, weekends, or holidays. We are here to help you and want to see you in your new home today.